Magnetar Said to Limit Fund Withdrawals After Losses

Bloomberg – Magnetar Capital LLC, the $8 billion hedge-fund firm co-run by former Citadel Investment Group LLC trader Alec Litowitz, limited withdrawals from its biggest fund after it lost 30 percent this year through November, according to two people familiar with the fund.

The restrictions, known as gates, were triggered after clients sought to pull more than 15 percent of their money from the firm’s $4.8 billion multistrategy fund, said the people, who asked not to be identified because the information is private.

Hedge funds including D.E. Shaw & Co. LP and Farallon Capital Management LLC this month imposed gates so they wouldn’t be forced to raise cash by liquidating assets at distressed prices. Magnetar, based in Evanston, Illinois, told clients who asked for redemptions by Dec. 31 that they will get 10 percent of their requests in cash and 5 percent in shares of its two credit funds, the people said.